The Department of Trade and Industry has rejected criticism of its chosen method for distributing wireless broadband licences, denying that Wales will lose out under the plan.

Several members of the Welsh Assembly are reported to be furious over the structure of the forthcoming 3.4GHz auction and are even considering intervening to block the bidding process. Wireless broadband experts also agree that the government's plan may be flawed.

Under this auction 15 licences -- each covering one region of the UK -- will be made available to companies to offer high-speed wireless broadband services.

The government has decided that four of these licences will each include a part of Wales as well as a part of England, and rejected an alternative suggestion that there should be two Wales-only licences.

This means that North Wales is bundled with rural parts of Yorkshire and North West England in one licence, Mid-Wales is included with rural Midlands in a second, South Wales and South-West England form a third licence, and Cardiff and Newport are included with the Bristol area in a fourth licence, called Severnside.

This four-way split, the government insists, is in the best interests of Welsh residents.

By bundling areas of Wales in with parts of England -- which are typically more densely populated and thus more commercially attractive to a wireless broadband provider -- Wales stands a better chance of getting affordable wireless broadband, the government believes.

Members of the Welsh Assembly are not convinced, though.

According to BBC Online, there was heated debate about the issue last week, with former Plaid Cymru president Dafydd Wigley slamming the government's plans as "lunatic".

Andrew Davies, Welsh Assembly minister for economic development, is reported to have said that in its present form the auction would be "to the detriment of Wales."

During last year's consultation process, the Welsh Assembly had proposed that one licence should be awarded for the geographic area in Wales that qualifies for the European Commission's Objective One funding, and one licence for the geographic area that does not.

This proposal, that would have seen the creationg of an East Wales licence and a West Wales licence, was rejected by the Radiocommunications Agency.

The government says that most of the people who took part in the consultation had favoured its initial suggestion -- of seven regional and seven metropolitan licences plus one for Northern Ireland.

"The majority of respondents agreed with the licence boundary proposals. The suggestions for licences to include areas totally within the boundaries of the Devolved Administrations and account for geographical conditions or political boundaries were rejected because there was little support for them and lack of evidence to suggest how they would be more successful than the initial proposals," a DTI spokesman told ZDNet UK.

"The licence boundaries were drawn up after in-depth market and economic studies to be as economically viable and inclusive as possible, maximising the potential development of sustainable wireless services and broadband market throughout the UK," the DTI spokesman added.

The auction is due to take place in May, but Dafydd Wigley is reported to be urging the Welsh Assembly government to consider intervening in the bidding process before it starts.

John Wilson, secretary of Arwain -- a pioneering Cardiff and Wales community wireless project -- told ZDNet UK that 3.4GHz could play a large part in making broadband available in rural areas, but warned that companies who win licences will have no obligation to launch services, as the government has decided not to include rollout obligations in the licence conditions.

"Broadband fixed wireless offers a last-mile solution, so for governments it is a public policy issue -- making broadband widely available -- not an issue of borders," Wilson said.

"The areas [covered by the four licences] have radically different demographics, with English metropolitan areas paired with Welsh 'remote and rural' areas. It will come down to a question of business models, as there is the issue of [an operator] cherrypicking the best areas," explained Wilson.

See the Broadband News Sectionfor the latest on cable modems, ADSL, satellite and other high-speed access technologies, including a comprehensive guide to the best deals out there.

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